Tough market conditions hit AI's plan to lease building

Air India's plan to lease vacant floors in its iconic Nariman Point headquarters in Mumbai is facing rough weather, but Civil Aviation Minister Ajit Singh is confident the government-owned carrier would be able to carry out its plans to monetise the real estate.

Air India plans to raise Rs 5,000 crore (Rs 50 billion) through sale or lease of its properties in Mumbai and Delhi. It also has properties and offices in cities in India and abroad, to which it does not even have flights.

The real estate monetisation plans include leasing 1,60,000 sq ft of floor space comprising 11 floors of the 23-storey Air India building. However, Air India has been forced to extend the bid date to November 29 due to a luke-warm response from companies. Air India occupies six floors of the building and three of these have been leased out. The rest are largely unused. Air India plans to shifts its headquarters to New Delhi and let out its office space to private parties.

Singh admitted the real estate monetisation was being impacted due to sectoral problems. Real estate is going through a difficult time. It (Air India building) is in an old area and a lot of companies are moving to newer areas,' Singh stated.